In U-Turn, Amylin Lays Off 200; Move Validates Icahn's Arguments

(MoneyWatch)  Amylin says it will lay off 200 drug sales reps, or 35 percent of its force, in order to save $45 billion in costs. The move is an embarrassing U-turn for Amylin, which only days ago was arguing fiercely that after laying off 340 people last November it had cut jobs enough, and that further cuts would "undermine" the launch of Byetta once-weekly.

Amylin made that point in response to Carl Icahn's attempt to take over the company. Icahn believes Amylin's stock has fallen in part because the company has failed to manage its costs.

After an unpleasant series of phone calls last April, here's what Amylin wrote to Icahn on April 20:

... We believe additional cost cuts of 30% from our current budget would undermine our efforts to develop, prepare for and launch exenatide once weekly ...

... in 2008 we conducted an in-depth review of our operating expenses in a thoughtful and strategic manner. This led to a November 2008 restructuring, resulting in the reduction of 25% (340 employees) of our San Diego based workforce. ...

In short, our plan already has delivered substantial progress toward our stated goal of achieving positive operating cash flow by the end of 2010.

Here's what Amylin said yesterday:

The changes are expected to be implemented in the next several weeks and will reduce the total number of Amylin sales representatives by approximately 35 percent, or 200 employees ...

The new sales approach is part of Amylin's continuing efforts to improve the efficiency and effectiveness of exenatide alliance operations ...

So, to recap: Amylin last month said cuts of 30 percent would "undermine" once-weekly Byetta, but this month says that cuts of 35 percent will "improve" the launch.

• See previous coverage of Amylin:
• Amylin Trial Testimony: Debt Not Structured With Interest or Principal Payments in Mind
• The War for Amylin: Lilly Not Interested; Icahn Calls the Company a "Dictatorship"
• Amylin CEO Got 11% Pay Rise Despite Losses; Company Paid $355K for Lawyer to Move House
• Amylin Q1: "Icahn Doesn't Know Who Our CEO Is"
• In War for Amylin, Icahn and Eastbourne Win a Battle: "Poison Pill" Revoked
• Amylin Founder Resigns, Suggests Chairman Follow; Icahn and Eastbourne Likely Delighted
• Inside Amylin's Anti-Icahn Suicide Pact
• Amylin Battle Heats Up as Eastbourne Capital Touts Rival Directors' Slate to Icahn's
• Icahn Moves on Amylin; Will Lilly Step Up?
• Behind the Byetta Crisis: Is This Drug Really All That and a Bag of (Fat-Free) Chips?